Texas LNG Closer to FID with New Financing

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

The developers of the Texas LNG facility said FID is within sight after the project received additional capital support. The facility could be one of the cleanest when commercial operations begin in 2029.

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FID by Early This Year

Some $5.7 billion in debt financing puts the Texas LNG facility one step closer to reaching a final investment decision this year, developers said Monday.

"Strong support from the capital markets, along with the recently completed offtake process, advances Texas LNG toward a positive final investment decision (FID) in early 2026 and toward the delivery of a dependable new source of U.S. LNG supply beginning around 2030," said Vlad Bluzer, a co-president of Texas LNG and partner at main backer Glenfarne Group.

Financing efforts were led by organizations such as commercial banker CIBC, while offtake agreements already were secured from companies ranging from Germany's RWE to Swiss trading house Gunvor.

LNG is seen as a so-called "bridge fuel" for the transition away from fossil fuels because it is less polluting than coal. Methane emissions are a nagging concern for critics of the industry, however, who note that natural gas is still a polluting fossil fuel.

Texas LNG said it would be able to alleviate at least some of those environmental concerns by using electric motors powered by renewable energy to drive operations at the Brownsville plant.

Texas LNG is planning to build its facility on a 625-acre site situated close to access points for gas flows from the Permian and Eagle Ford shale basins. Of those, the Permian is the most prolific gas producer, which is expected to average about 29 billion cubic feet per day (Bcf/d) for this year.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil and Gas Production Project and Plant databases can learn more about Texas LNG--including capacities, investment values and necessary equipment--from detailed project reports and a plant profile.

If completed as intended, the facility would be a mid-scale plant with an export capacity of 2 million metric tons per annum (MTPA). It is listed as a medium-term probability project in IIR's database, with at least a 70% chance of moving forward.

It could be ready for deliveries by late 2029, coming online at a time when various analyses point to an oversupplied market that could deter future investments. Meanwhile, increasing commitments for LNG exports could create supply-side pressures at home, leading to higher consumer bills.

By the Numbers

• 2 MTPA expected from Texas LNG
• $5.7 billion in debt financing
• 70% chance of Texas LNG moving forward

Sector Recovering from Winter Storm

Extreme winter weather last month curtailed operations in the North American energy sector as sub-freezing temperatures as far south as the Texas coast led to pipeline issues and feedstock shortages.

IIR Energy confirmed last week that at least six power plants were knocked offline briefly amid the storm, the largest of which was the 755-megawatt (MW) Deptford Power Station in New Jersey.

Subscribers with access to the Breaking Energy News (BEN) feature from IIR Energy Intelligence can read the alert on plant outages.

The appetite for natural gas, meanwhile, soared as home-heating demand kicked up. About 40% of U.S. consumers get their heat and electricity from natural gas. Temperature concerns eased, however, as the calendar turned to February, with only Florida and parts of the Carolinas under cold-weather advisories for Monday.

"While temperatures have moderated from the peak of the storm, conditions remain colder than average across large portions of the Midwest and Northeast, continuing to support elevated heating demand relative to seasonal norms," Maria Sanchez, a senior natural gas analyst at IIR Energy, wrote in a Monday report.

U.S. natural gas consumption was down about 10 billion cubic feet (Bcf) from Friday, while production at 106 Bcf marked a substantial rebound from the storm-related low of 93.2 Bcf from January 25.

"Output has rebounded as freeze-offs gradually subside, particularly in key producing regions, though production levels remain below pre-storm highs, suggesting lingering operational impacts," Sanchez added.

That has left feedstock for LNG levels below recent highs of about 19 billion cubic feet per day. Unspecified issues with the Elba Island facility off the coast of Georgia are compounding the issue.

On Monday, IIR Energy put LNG feedstock at about 18.4 billion cubic feet, above the federal estimate for the year of 16 Bcf/d.

Key Takeaways

• FID is one step closer to reality
• Texas LNG could be clean
• Offtake agreements already in place

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).